SEC v. Brent Borland; Borland Capital Group, LLC; and Belize Infrastructure Fund I, LLC, No. 1:18-cv-04352, Southern District of New York (May 16, 2018) — Complaint

JUDGE
S~'~,
Benjamin
J. Hanauer
(pending
pro hac vice)
Timothy
S.
Leiman
(pending
pro hac vice)
Andrew P.
O'Brien (pending
pro
hac vice)
Charles
J. Kerstetter
(pending pro hac vice)
Alyssa
Qualls
United
States
Securities and
Exchange Commission
Chicago Regional
Office
1
75 West
Jackson Blvd.,
Suite 1450
Chicago, IL 60604
(
312)
353-7390
UNITED
STATES
DISTRICT COURT
SOUTHERN
DISTRICT OF NEW YORK
U
NITED
STATES
SECURITIES
AND EXCHANGE
COMMISSION,
P
laintiff,
v.
B
RENT
BORLAND,
BORLAND
CAPITAL
GROUP, LLC, and
BELIZE
I
NFRASTRUCTURE HIND I,
LLC
D
efendants, and
CANYON
ACQUISITIONS, LLC, and
ALANA LaTORRA
BORLAND,
Relief
Defendants.
1
8 CV
ECF CASE
C
OMPLAINT
CIV. ( )
JiiRY
DEMANDED
Plaintiff United States
Securities and
Exchange
Commission (the "SEC" or
"Commission")
alleges as
follows:
~~5
2
1.
This case
centers on a fr
audulent scheme
perpetrated by Defendant Brent Borland
through two
entities that
he
owned and controlled: (1)
Borland Capital Group, LLC ("BCG") an
d
(2)
Belize Infrastructure
Fund I,
LLC ("Belize Fund").

2.
Although Borland, BCG,
and Belize
Fund
(collectively,
"Defendants") used
multiple holding
companies and over a dozen
bank accounts to
perpetrate their fr
aud,
their
u
nderlying scheme was simple.
Between 2014 and June of 2017,
Defendants
sold at
least
$21.9
m
illion of promissory notes (the
"Notes")
to at least 44
investors
in at least eight
states.
Defendants promised
investors that their money would be
used as bridge financing to
fund
construction and
development of an
international airport in Placentia, Belize (the "Placentia
Airport").
But, rather than use all of
the funds asrepresented,
Borland
misappropriated more
than
$5.98 million of investor assets an
d
used the
stolen
principal
to
fund his
family's lavish
l
ifestyle.
3.
Borland funneled investor
funds to himself and his
family
using the
account of
another
entity under his control, Relief
Defendant Canyon
Acquisitions, LLC ("Canyon") — a
holding company owned
by Borland and
his
wife,
Relief Defendant
Alana LaTorra
Borland
("Alana"}.
From
Canyon's account, Borland used
investor
funds to
pay
his family's expenses,
including:
(a) mortgage and
property tax
payments
on the
Borlands' multi-million
dollar Florida
m
an
sion,
(b) multiple
luxury automobiles,
(c)
tuition for the
Borlands'
children at
anelite private
s
chool, (d) $36,000 for the Borlands' membership at a
posh beach club in Delray Beach,
Florida,
(e)
nearly $ I0,000 for
high-end watches, and (fl almost $2.7 million to pay off Alana's credit
cards.
4. While
Borland an
d
his family enjoyed the
benefits
of at least $5.98 million in
purloined
investor cash, Note
investors
were not so
lucky. The maturity
dates
on almost all, if
not all,
of the Notes have passed
without repayment and all of the Notes have slipped into
default.
To
this
day, the overwhelming majority of
Note investors have been paid none of what
they are owed —
no interest payments
an
d
no return of principal.
2

In
the
course of the fraud,
Defendants repeatedly
lied to —and hid
material
information from
—investors.
In
addition to lying about
the use of
investor
funds,
Defendants
promised
outlandish
returns with
quick payment terms. But, while
selling the
Notes to
new
investors,
Defendants hid the
fact
that
the
overwhelming majority of prior
Notes were in default
and prior Note
investors had not been paid a
dime of interest or principal.
6.
To make matters worse,
Defendants perpetuated their
fraudulent scheme by
s
ecretly re
-pledging the same collateral
to multiple investors.
Defendants
led
investors to believe
that their
Notes were secured
by valuable real
estate
that
was
(a) worth at
least
twice
as
much
as
the amount
of the Note,
(b)
secured only
that individual Note, and (c)
would not be encumbered
by any other liens or security
interests. In reality, Borland pledged
the same pazcels
of real estate
to multiple
investors
an
d reported
fake
valuations
for
the
properties to
investors
to
make it
appear that the
parcels were worth
twice the
face
value
of the Note.
7.
By making material
misrepresentations and omissions to investors, and by
e
ngaging in a fraudulent offering
scheme, Borland, BCG an
d Belize Fund have
committed
securities fraud in
violation of Section 10(b) of the
Securities
Exchange
Act of 1934 (the
"Exchange
Act") [15 U.S.C. §78j(b}]
an
d
Rule lOb-5
thereunder
(17 C.F.R. 240.1Ob-5]
and
Section
17(a}
of
the
Securities
Act
of
1933
(the "Securities Act") [15 U.S.C. §
77q(a)].
8.
Borland's family —including Alana and
his
mother in-law
—benefited from
D
efendants' fraud. And, the money that
Borland took from investors to
fund his
family's
lifestyle was only a fraction of the
more than
$14.4 million of investor
funds that Borland
funneled through
Canyon. Canyon and Alana have no legitimate claim
to
the investor funds that
they received as a result
of Defendants' fraud and, therefore, were unjustly
enriched by
receiving
those
funds. Canyon and Alana are, therefore, proper
Relief Defendants in this action.
3

9. The SEC brings this lawsuit
to
stop
Defendants' violations of the
federal
s
ecurities
laws, to
prevent
further harm
to investors,
and
to seek disgorgement and civil penalties
stemming from Defendants' wrongdoing, among other remedies.
JURISDICTION AND VENUE
1
0.
The
SEC brings this action under Securities Act Section 20(b) [IS U.S.C.
§
77t(b)],
and
Exchange Act
Sections
21(d) an
d (e)
[15 U.S.C.
§§78u(d) and 78u(e)].
11. This Court has jurisdiction over this
action pursuant to Section 22 of the
Securities
Act [15
U.S.C. §
?7v] an
d
Section
27 of the Exchange
Act
[15
U.S.C. §
78aa].
1
2. Venue
is
proper
in
this
Court
pursuant to Section
27 of
the
Exchange Act [15
U.S.C. §
78aa]. Many
of
the
acts, practices, and courses of business
constituting the violations
alleged herein have occurred within the jurisdiction of the United States
District Court for the
Southern District of
New
York.
1
3.
Defendant Borland ran
BCG
out
of its offices
at
79
Madison Avenue in
M
anhattan an
d has
conducted business relating
to the
Notes from that
location, along with
another office in
this
District, including having phone calls and meetings with existing and
prospective Note
investors.
1
4.
Defendants directly and
indirectly made use of
the means an
d instrumentalities of
interstate commerce and of the
mails
in
connection with the acts, practices, and courses
of
b
usiness
alleged herein,
an
d will
continue
to do so unless enjoined.
DEFENDANTS
15. Brent
Borland,
age
48, is
a
resident
of Sag Hazbor,
New
York,
with a second
home
in Delray Beach, Florida.
Borland is
the sole owner of
BCG
—which
he
operates out
of its
Manhattan office —and Belize Fund. Borland co-owns
Canyon with his
wife,
Alana.
In 2011,
the
4

Ontario
(Canada) Securities Commission initiated anaction against
Borland, Canyon,
and others.
That action
involved
anunregistered
securities
offering where
Borland and his
codefendants sold
investments in various
real estate development
projects, primarily projects in Belize. To resolve
that
action,
Borland and
his codefendants were
required
to
repay investors, and cease offering the
i
nvestments
at issue. Borland
was
further barred from being an
officer
or director of any issuer,
registrant, or investment fund subject
to
the
jurisdiction of the Ontario Securities Commission.
16.
Belize Infrastructure Fund Y, LLC is a Florida
Limited Liability Company that
purports to be in the business of selling
promissory notes to finance the
construction of
an
airport
in Placencia, Belize. The Belize Fund
is
owned and operated by Borland.
17. Borland
Capital
Group, LLC, is
a Delaware
Limited Liability Company
headquartered in New York City. It has offices located at
79 Madison
Avenue
in Manhattan.
According to its website,
BCG
claims
to be "a
multi
-strategy investment holding company."
Among other
things, BCG purports to be active in "alternative investments such
as.. .
infrastructure
investment,
development, and monetization." BCG is owned and
operated
by
B
orland.
RELIEF DEFENDANTS
18. Canyon
Acquisitions, LLC, is a Nevada Limited Liability Company. Canyon is
owned by Borland and Alana. Borland's mother in-law serves as
Canyon's
office nnanager
an
d
i
ssues checks an
d
money orders from Canyon's account at
th
e
Borlands'
direction.
As
described
below, in the course of
Defendants' fraud, Canyon
took
at
least
$14.4 million of investor
funds
i
nto its domestic checking account
—money
to which Canyon had
no legitimate claim. Borland
and
Alana then used the
Canyon account to pay for their own personal expenses.

19. Alana
LaTorra Borland, age 41, is a resident of Sag
Harbor,
New
York, with a
second home in Delray
Beach,
Florida.
Alana is Brent Borland's wife and co
-owns Canyon with
B
orland.
As
alleged below,
in the course of
Defendants'
fraud, Alana received the
benefit of
investor funds to which she had no legitimate claim, including (a) mortgage and property tax
p
ayments
on her home,
(b) tuition payments for
her
children, (c) a family
beach
club
membership, and (d) almost $2.7 million used to pay off her credit cards.
FACTS
Borland and His Entities:
20. Borland is
the sole
owner of BCG, a Manhattan
-based
firm that, according to its
w
ebsite, claims to be "a multi-strategy investment holding company" that is "active
in...alternative investments such as....infrastructure investment."
21. Among other
projects, BCG claims to have invested
millions
of
dollars
in a large
resort complex near
Placencia, Belize and
claims to have invested $24 million along
with its
Belizean
partners towazds
constructing and developing a private airstrip near the
purported
resort
project
into an
international airport. Borland
claims
that the airstrip
—which he calls the
P
lacentia International
Airport —would, in addition
to
helping
Borland and his
partners
sell real
estate in a
nearby
planned
development, be "a significant
standalone revenue generator" and that,
o
nce
operational,
it
would
immediately receive 35 flights per day.
22. Borland
solicited
investments in his purported Placentia Airport project
through
BCG and Belize Fund.
23. Borland
controlled
both BCG and Belize Fund,
exercising
control over every
aspect
of their
operations,
including transactions to and
from their bank
accounts. Borland
signed
D

all of the Notes issued by
BCG
and Belize
Fund an
d all
of the
pledges
of collateral issued
to
secure those Notes.
B
orland Sells
Over
$21.9 Million of
Promissory
Notes To Investors:
24. From
at
least
2014 through June
2017, Borland, BCG, and
Belize Fund
offered
and sold promissory notes to investors in the United States. In
that
time, BCG and Belize Fund
sold at least 66 Notes to at least
44
investors in at least 8 states,
generating
proceeds
of
at
least
$21.9 million.
Most of the
Notes were issued by Belize Fund,
while
some
were issued in the
name of
BCG.
25. In
marketing ttie Notes to investors,
Borland — and a BCG employee acting at his
direction —told investors that the
proceeds of the Notes would be used for the
construction and
development of the Placencia
Airport. Borland told investors that
he an
d a partner in Belize had
i
nvested $24 million in the airport an
d
that he
needed "bridge lenders" to
provide
additional,
short-term funding for airport construction while he worked
to secure
more substantial,
long-
term financing
from institutional investors to complete
the
project.
26. Borland, BCG,~ and Belize
Fund promised
investors unusually
generous returns
and
quick
repayment.
At
a time when the federal funds rate
was
below
1
%per year,
the Notes
generally provided fora 15%return after 3 months and
1%per month
for each month after
the
first
three months,
effectively offering interest
of 24%per year.
27. The Notes also promised a quick
pay-off.
Most of the Notes had a 12 or 24-month
term.
Some of the
Notes provided aneven shorter term with a
maturity
date
3 months
after
th
e
date of the Note.
28. Borland, BCG, and
Belize Fund told the Note
investors that the Notes were
"bridge financing" and would be
repaid quickly. In fact, the
Notes specified that while
payment
7

would
be due by the
maturity date, the borrower — i. e.,
BCG
or
Belize Fund
—would be required
t
o "pre-pay (retire)" the Note
within seven days if a target amount
of investment
was obtained
for the
"Placentia International Airport Project."
In other words, payment
on the Note
was
due
by the
maturity date or when
Defendants obtained long-term
financing for the Placentia
Airport
—whichever came
first.
2
9. Borland told investors that he
expected
to close such long-term financing for the
Placentia Airport in short order because the
airport was an
attractive
investment. Indeed,
Borland told at least one investor
that
he
"guaranteed" that his investment would only be for a
short term.
30. Although the maturity of
th
e
Notes could be accelerated if
BCG or Belize Fund
o
btained
long-term
financing for
the
Placentia Airport,
BCG's
and Belize
Fund's payment
o
bligations on the Notes were not
contingent on such financing. Each Note
specified that "[i]f
the
Borrower does not satisfy all amounts due on [the Note]
on the Maturity Date,
th
e
Borrower
will
be in
default" and that a penalty rate of
interest would accrue until the Note
was paid. In
o
ther
words,
regardless of whether Defendants obtained long-term
financing for
the Placentia
A
irport, th
e
Notes were in default once the maturity
date passed without payment of
principal
and interest.
31. The
Notes are "securities" as that term is defined in Exchange Act Section
3(a)(10) [15
U.S.C. § 78c(a)(10)] and Securities Act Section 2(a)(1) [15 U.S.C. § 77b(a)(1)].
32. The Notes suggest the
intended use of investors' principal. They specify
that the
"Bridge
Note" would come due once sufficient
financing was
obtained for the
"Placentia
International Airport
Project."

33.
Instead of a prospectus or offering memorandum, Borland used
intermediate
b
rokers
to
introduce the
investment opportunity to
investors. Borland an
d/or
his BCG
employee
then offered a more detailed
explanation of the investment to interested investors by telephone,
e-mail, and web
presentation. Borland and his BCG
employee
told investors during those calls,
presentations, and in emails
that
their money would be used for construction of the
Placencia
Airport.
34. Neither
Borland nor his BCG
employee told
investors
that
any
portion
of their
Note proceeds
would be paid to Borland or his
family. Nor did they
mention any other uses
of
Note
proceeds aside from the
Placencia Airport.
Borland's
Misappropriation Of
Investor
Funds:
35. While
Borland an
d
his
entities
were raising
$21.9
million from Note investors,
Borland took at least $5.98
million
of
that money to fund his lavish lifestyle.
36. Borland misappropriated the vast majority of
that
$5.98
million
of investor
cash
by funneling it
through
Canyon,
an
entity that he owns with his wife, Alana, and which
employed Alana's mother. From there, Borland and Alana directed Alana's
mother
to
issue
c
hecks and wire tr
ansfers to
pay
the Borlands' personal expenses.
37. From April 1, 2014 through September
29,
2017, Borland sent more than $14.4
million of Note
proceeds to Canyon's domestic checking account. Although Canyon had some
funds from other
sources, that
$14.4
million
of
investor cash represented more than
89%
of the
money
taken into Canyon's account. None of the funds
in the Canyon account was transferred to
a
ccounts
in Belize or was otherwise used
for construction
projects
in Belize.

38. Instead, Borland and his wife used the Canyon account —
an
d
a BCG account that
a
lso
was
funded with Note proceeds — astheir personal piggy-banks. From those
accounts, the
Borlands
took
at least
$5.98 million to pay
personal
expenses.
39. For example, between April
1, 2014 and September
29,
2017, the
Borlands
made
the following
personal
expenditures
from the Canyon
account
that was funded with
misappropriated investor
principal:
(a) at least $925,785 in
mortgage payments on properties owned
by Borland
an
d
Alana, including their b,000 square
foot, multi-million dollar Florida mansion;
(b) more
than $61,940
in
property taxes
on Borland and Alana's
Florida home in
2016
and
2017;
(c) more than $97,000 to pay
private school tuition for the Borlands' children;
(d) more than $36,000 for the Borlands' membership and fees at a private beach
club and day spa in Delray Beach, Florida;
(e)
more than $31,000
to
a high-end department store;
(~ more than $11,000 in dues to Alana's mother's homeowners association;
(g) a
nearly
$10,000 payment to anonline luxury watch website; and
(h) more than
$183,000.00 in cash withdrawals.
40. Between
Apri14,
2014 and
September
29,
2017, Borland and Alana
also
took
at
least $2.6? million from Canyon's account to pay off four credit cazd accounts in
Alana's
name.
The credit card
accounts were used primarily for personal expenses of the
Borlands and
none
of
t
he
credit card charges related to airport
construction in Belize.
41. In
addition, Borland and his wife used investor funds to buy
luxury
automobiles.
For example:
10

(a) On March 2, 2015, Borland
took $25,000 from the
Canyon account to make a
payment on a
Mercedes G63 luxury
Sport
Utility
Vehicle
("SW")
which
has
a
sticker price over $140,000;
(b)
In
June 2015, Borland took $66,659.38 fr
om a
BCG
account
—which included
co
-mingled
investor funds —which he sent to a
Cadillac dealership in
East
T
otowa,
New Jersey; and
(c) On April 27, 2017,
Borland directed a second payment of $61,937.50 from the
same BCG
account to the same Cadillac dealership towazd the
purchase of
a
Cadillac
Escalade luxury
SW.
42. In
total,
Borland
misappropriated over
$5.98 million from accounts
holding
co-
mingled
investor funds to pay
for
his family's
lavish lifestyle,
including payments
that benefitted
Alana.
43. While he
solicited funds from investors and then
misappropriated investor funds
for his family's expenses, Borland
—acting through BCG, and Belize Fund —acted with scienter.
Borland
knew —
or recklessly disregarded —that
the overwhelming majority of assets
in the
C
anyon account
came from Note
proceeds
and that money from
that account was being
used to
pay his
family's personal expenses.
Borland, BCG. and Belize
Fund
Lied
To Investors
About the Use
of Investor
Funds:
44.
From 2014 through at least June
2017, Borland, BCG, and Belize Fund told
investors (and
prospective investors) that their principal would be used
to fund construction
an
d
development of the
Placencia Airport. Similarly, term
sheets Defendants provided
to investors
represent that
investors'
proceeds
will be used for
"operating capital." No other use of
investor
principal
was
disclosed to investors.

45.
Those
representations were false
when made.
While a
portion
of the
invested
f
unds may have
been
used to fund
construction
projects, Borland
used at least
40% of
investor
f
unds for other
purposes. Most
significantly, as
discussed at
paragraphs
35-43 above, Borland
u
sed at least
$5.98
million
of investor
principal to pay
his family's personal
expenses.
46.
In
addition to using
investor
funds
to
pay
personal
expenses,
Borland,
BCG,
and
t
he Belize Fund
diverted
Note proceeds
to fund real estate
projects that
had
no relation to Belize
c
onstruction projects and
that
were never
discussed with
investors.
Specifically,
Belize Fund sent
$778,000
to
a
BCG account dedicated
to a New
York
condominium investment
at the New York
R
itz
Carlton
Residences
in
White
Plains, New York and an
other luxury
condominium building in
New
Rochelle, New
York. Borland,
BCG,
and
Belize Fund did not tell
Note
investors
that
a
portion of their
principal would be
used to fund investments in New
York
condominiums.
47. Borland,
BCG, and Belize Fund also
diverted
$1,431,568 of investor
funds to
pay
third
party brokers who introduced
investors to
BCG
and Belize Fund.
48.
In
sum,
Borland,
BCG,
and Belize
Fund
took at least
$8,940,666 of investor funds
and
used
that
money in ways that were
not related to the disclosed purpose of
the Notes — i. e., to
fund
construction at the Placencia
Airport and related projects in Belize. Those misused
funds
represent
at least 40% of the all funds raised from Note investors.
4
9. Defendants' misrepresentations to Note investors
regarding use
of funds were
m
aterial. In making aninvestment decision, a reasonable
investor would
deem it important that —
instead
of using investor funds aspromised (i. e., to
fund the
construction of
Placentia Airport) —
approximately 40%
of investor
funds
was diverted for
other purposes,
including unrelated real
estate projects, investor commissions,
and over $5.98 million for the Borlands'
personal
e
xpenses.
12

50. In
making the
misrepresentations
an
d
omissions identified above,
Borland, BCG,
an
d
Belize Fund acted with scienter. At the time they told
prospective
investors about the nature
of their investment, Borland,
BCG,
and the Belize Fund knew — or
recklessly
disregarded
—that
the representations were not
true an
d
that they had diverted a significant
portion of investor
funds
for
Borland's personal use and for other purposes unrelated to
construction projects
in
Belize.
D
efendants' Fraudulent Pledging of the Sarae
Collateral
to
Multiple
Investors:
5
1. All Note
investors
received pledges of collateral
as
"security" for their notes. As
c
ollateral,
Borland pledged pazcels of
real estate in Belize
purportedly owned by Mayan Lagoon
Estates, LTD {"Mayan
Estates").
All of the pledges of
Mayan Estates pazcels
were
signed by
Borland and one of his purported Belizean partners.
52. The
collateral pledge documents prohibited the pledged
parcels of land
from
being transferred or
encumbered in any way during the term of the pledge. With
minor
language
deviations, the
pledge documents each state that BCG and the Belize
Fund "shall not
tran
sferor
encumber in any
way this pledged property.
Pledgor shall not permit any
mortgages
or
liens
to
attach
to
the
pledged property until the
loan is repaid in its entirety."
53. Despite the fact that the pledge
documents prohibited the pledged
property from
being tran
sferred or encumbered in any way
during the term of the pledge, Borland,
BCG
and
Belize Fund
pledged the
same
pazcels of
property to multiple investors.
54. Most
investors
were affected
by this practice, as
approximately 77% of the
Notes
were secured
by collateral that Borland, BCG,
and Belize Fund
surreptitiously pledged to other
i
nvestors.
13

5~. For example, between .l~ebruary and
June
of
201
~, Borland pledged the same
parcel of
land —described
as
`'Placencia Narth Block 36 Parcel
2169
.Known
as
Lot 84 of the
subdivision" — as
collateral
to
secure
Notes of
at least 12 different investors. Borland did not
inform any
of
the 12
investors
that their collateral
secured
other Notes.
~6. As
another example, the
below
chart reflects
three instances where the
same
parcel of land
—described
as "Lot
31"
—was
pledged
to
secure three dii'ferent Notes within
w
eeks of
one
an
other
in
June
of
2016:
The
Surreptitious Re-Pledging
~f Lot 31 t~ Three Investors
`
Date of
N
ote
.
:.9iS++i
Terni""of
~Tute
-«end`.
~
12
Investor
4mount
of ~
Note
Pledged
:
l,ot
.t..
Duration
of Pied~e
'.3.'
F.~..
- aiue'o
Lot ~ s
-
~
6-3-2016mo.
I~ivestor A
$250,000Lot 31
12
mo.
X500,000
6-24-2016
12
mo.Investor B
$1,000.00a
Lot 31121no.X2,000,000
6-27-2d 1 b12 mo.Investor C$
l 00,000Lot 3112 mo.$200,000
57.
Borland signed
each
of the Collateral Pledge t-lgreements securing
the three Notes
identified iii the above
table.
Each Collateral
fledge
Agreement stated
that:
"Prior to obtaining
[
the investor's] written consent, [Mayan Estates] shall not transfer or
encumber in
any
way
this
pledged property. [Mayan
Estates] shall
not perniit
any mortgages
or liens to
attach to
the
pledged
property
unfit
the loan
is
repaid
in its
entirety." Despite that fact, after
using
Lot
31 to
secure the mote for Investor ~, I3orl~ind encumbered Lot 31 ~~~ith
two
additional security
interests
~y
re
-pledging it
as
collateral
to
secure
the Notes for Investor B and Investor
C.
~s. In
the
case
of
the three
investors
identif ed in the
above
table,
Borland not only
improperly pledged the same
collateral simultaneously
to
each
~f the three investors, he
d
isclosed a
very different valuation for
the collateral
each
time
he pled4~ed it.
Each time he
p
ledged
Lot 31 as
collateral, Borland
assigned ~ value to the lot
designed to make it appear that
t}~e lit
vas worth t~~ice
tl~e amatint of
the Note in~restmet~t.
1
4

59.
Specifically, in the 24
-day
period between the three
Notes,
Borland
disclosed
three
different
valuations for Lot 31, ranging
between
$200,000
an
d
$2,000,000. If Lot
31 even
exists, at least
two —and possibly all three — of
the
valuations that Borland
provided for Lot 31
w
ere fake.
60.
Borland's secret re-pledging of the same
collateral to multiple
investors —and
B
orland's disclosure of wildly different
valuations for the same collateral for each Note
it
s
ecured
—was
material.
Borland, BCG, and the Belize Fund told
investors that the collateral
pledges would be exclusive.
In making aninvestment decision, a reasonable
investor would
have
found it important that their
collateral
was
securing the
Notes of other investors.
Such
duplicative
pledging necessarily
reduces
the
value of the collateral
to
any one
investor and
r
educes
the
chance
that the collateral — if it exists
at all —could be used to
secure the
investment
in
the event of default.
A reasonable investor
also would find it important th
at the identified
c
ollateral was assigned
radically different
valuations when securing other
Notes.
6
1.
In pledging the same
collateral
to multiple investors
—and assigning
substantially
d
ifferent values to the
same
pazcels
when pledging
the parcel
to secure
multiple Notes —Borland,
BCG, and Belize Fund
acted with
scienter. Borland signed
each of the
Notes
on
behalf
of BCG
and Belize
Fund and
signed each of
the collateral pledge
documents
related
to those
Notes.
W
hen he
signed, Borland knew —
or
recklessly
disregarded —that (1) the same
parcels of real
e
state were being
pledged to
secure multiple
Notes, (2)
the collateral
pledge
documents expressly
p
rohibited the
Defendants from
encumbering the
collateral
once pledged
(effectively barring the
D
efendants from
pledging the same
parcel
to multiple investors),
and
(3)
the
collateral
pledge
d
ocuments
assigned
very different
valuations to the same
parcel
when securing
multiple
Notes
(
reflecting that
at
least
some of the
valuations
were fake).
15

Defendants Fail to Tell New
Note
Purchasers That
Older
Notes
Were
In Default:
62. With few exceptions, investors
in the Notes have never received
any interest
payments
or
a
return
of any portion of
their principal. Over
the course of the scheme,
virtually
all, if not all, of the Notes have
entered default as the maturity dates
passed without repayment.
63.
In marketing the Notes to
Investors, Borland, BCG,
and Belize Fund
touted
the
i
nvestment potential of the
Placencia Airport and assured
investors
that
they
would
be
repaid
on
t
ime (if
not before).
6
4. But,
Borland, BCG,
and
Belize Fund failed to
disclose to new Note investors
that
the
overwhelming majority of prior Note
investors had not been
paid and that the prior
Notes
were in default.
65. For example, on Apri18,
2015, Borland,
BCG,
and Belize
Fund sold a $150,000
N
ote
to
Investor D. That note provided for repayment
in three
months.
But at that time, Belize
Fund
already
was
in
default on
nearly $3 million of Notes it had sold to
prior
investors. Like the
Note sold
to
Investor D, the earlier notes provided for repayment in three months. Before he
made
his
investment
on the
expectation that he would be repaid in three months, Investor D was
not
told that Belize Fund already had defaulted on
nearly
identical Notes with the same 3-month
t
erm.
66.
Investor D's
Note
has long passed its July 8, 2015 maturity date. But — to this day
—Investor D has not
been
paid
any
interest
or principal.
67.
Similarly, on March 30, 2016, a year after Investor
D
purchased
his note —and
o
ver
eight
months after Investor D's Note entered
default — Investor E
bought a $500,000 note
issued by
Belize Fund.
Though Investor E's Note
had
a 12
-month term,
Borland assured Investor
Ethat
long-term
financing for the Placencia
Airpart was imminent and the
Note would be repaid
16

within
a few
months.
Investor E was never told that — at the time
he
made
his
investment —
Belize Fund
already had defaulted on Notes sold to Investor D and other
investors.
68. As with the other Notes, Investor E's
Note
is
now
in default and Investor
E has
not
received
any
interest or principal payments.
69. Defendants' misrepresentations
and omissions related to prior
Note defaults were
material. In evaluating
whether to invest in the Notes, a
reasonable
investor
would consider it
important that substantively
identical
Notes
issued
to
prior investors were
in
default and
that
prior investors had received no
interest
or
principal
payments
on their investment.
70.
In hiding prior Note defaults from
Note investors,
Borland, BCG, and
Belize
Fund acted with scienter. Borland signed
each Note
issued to investors,
communicated with
prospective investors about the Notes, an
d controlled every aspect
of BCG's
and Belize
Fund's
i
nteractions
with
investors.
In communicating with
new
investors,
Borland,
BCG, an
d
Belize
Fund knew — or recklessly disregarded —that Notes issued to prior investors were
in default
an
d
that nearly all prior
investors
had received little if any payment on their investment.
Borland Invokes the Fifth
Amendment in Resaonse to Questions
Posed
by
the
SEC:
71. As part of its investigation
into
the securities law
violations identified
in this
C
omplaint, the
SEC issued subpoenas to Borland, his second-in-command at BCG, his wife
A
lana, and
his mother
in-law, requiring
each of them
to
appear
an
d provide
testimony
under oath
t
o the
SEC
regarding
matters
including the
use
of
funds
Borland raised
from investors.
72.
Borland, his second-in
-command, Alana, and
Alana's
mother each refused to
provide substantive
answers to the
SEC's questions
and
instead invoked their right against
self-
incrimination under the
Fifth
Amendment to the U.S. Constitution.
1
7

COUNTI
Violations
of Section 10(b) of
the Exchange Act,
and
Exchange Act
Rule
lOb-5
(Against Defendants
Borland, BCG,
and Belize Fund)
73. Pazagraphs
1 through 72
are
realleged and incorporated by reference.
74. As more fully
described
in paragraphs 1
through 72, Defendants Borland, BCG,
an
d Belize Fund, in
connection
with
the
purchase and sale of securities,
by the use of the means
and
instrumentalities of
interstate commerce and by the use of
the mails, directly and indirectly:
used and employed devices, schemes an
d artifices to
defraud; made untrue statements of
material
fact and
onnitted to state material facts
necessary in
order to
make the
statements made,
in light
of
the
circumstances under which
they were made, not misleading; and
engaged in
acts, practices
and
courses
of business which operated or would
have operated
as
a
fr
aud and deceit upon
purchasers and prospective purchasers of securities.
75. As
described
in more detail in paragraphs 1 through 72
above
Defendants
Borland, BCG, and Belize
Fund
each
acted
with scienter in that they knowingly or recklessly
m
ade
the material
misrepresentations
and
omissions
and engaged in the fr
audulent
scheme
i
dentified above.
7
6. By reason of the
foregoing, Defendants Borland,
BCG,
and the
Belize Fund
v
iolated
Section
10(b) of the Exchange Act [15
U.S.C. §78j(b)] and Rule
lOb-5
thereunder [17
C.F.R. 240. I Ob-SJ.
COUNT
II
V
iolations of Section
17(a)(2) of the
Securities
Act
(
Against Defendants Borland,
BCG, and the Belize Fund)
77.
Paragraphs 1
through 72 are realleged an
d
incorporated by reference as though
fully
set
forth herein.
18

78. By
engaging in the conduct
described in paragraphs
1-72 above, Borland,
BCG,
and the Belize
Fund,
in the
offer
an
d sale of securities, by the use of
the means and instruments
o
f interstate
commerce, directly or indirectly,
employed devices,
schemes and
artifices to
d
efraud.
7
9.
Defendants
Borland, BCG, an
d the Belize
Fund intentionally or
recklessly
e
ngaged in the devices,
schemes, and artifices
described
above.
80.
By
reason of the
foregoing,
Defendants
Borland, BCG,
and the Belize
Fund
v
iolated
Section
17(a)(1) of the Securities
Act [15
U.S.C. §
77q(a)(1)}.
C
OUNT III
Violations of
Sections 17(a)(2)
and
(3)
of
the Securities
Act
(Against Defendants
Borland, BCG,
and the Belize
Fund)
8
1 _ Paragraphs 1 through 72 are
realleged an
d
incorporated by reference as
though
f
ully set forth herein.
82. By engaging
in the conduct
described
in paragraphs
1-72 above, Defendants
Borland, BCG,
and
the Belize Fund, in the offer
and sale of securities, by the
use of the means
and instruments of
transportation or
communication in interstate commerce or by
use of the
mails, directly or indirectly, have:
a. obtained
money or property by means
of untrue statements of
material
fact
or by omitting to state material
facts necessary in order to make the
statements made,
in light
of the
circumstances under which
they were
made, not
misleading;
an
d
b.
engaged
in transactions, practices, or courses of business
that
operated or
w
ould
operate as
a fraud or deceit upon the
purchasers
of such securities.
83.
Defendants
Borland, BCG, and the Belize Fund made
the untrue
statements an
d
o
missions of material fact and engaged in the
transactions, practices and courses of business
described
above.
19

84. By reason of the foregoing,
Defendants Borland, BCG, and the Belize
Fund have
v
iolated Sections 17(a)(2) and
(3)
of the
Securities Act [15 U.S.C. §
77q(a)(2)-(3)].
COUNT IV
(Relief Defendants Canyon and
Alana LaTorra
Borland)
8
5.
Paragraphs
1
through
72 are realleged and incorporated by reference.
86. As described in paragraphs 1-72 above,
between April 2014 and October 2017,
D
efendants transferred investor funds
for the benefit
of
Relief
Defendants
Canyon and Alana
LaTorra Borland.
87.
The proceeds
identified in paragraphs
1-72 are the proceeds of
the
violations
committed by Defendants Borland, BCG, an
d the Belize Fund described in this Complaint.
88. Relief Defendants
Canyon and Alana
LaTorra
Borland have no
legitimate claim
to the amounts received
from investors
identified in paragraphs 1-72, and
therefore were unjustly
enriched by
receiving
those
funds.
RELIEF REQUESTED
WHEREFORE, the Commission respectfully
requests that this
Court:
I.
Issue
findings of
fact
an
d conclusions
of law that defendants
committed the violations
charged an
d alleged
herein.
II.
E
nter anOrder of Permanent Injunction
restraining and enjoining
Defendants
Borland,
B
CG,
and the
Belize
Fund, their officers, agents,
servants,
employees, attorneys and those
persons in
active
concert or
participation with
defendants
who
receive
actual
notice of the Order,
by personal
service or
otherwise, and each of
them from,
directly or
indirectly, engaging in th
e
2
0

transactions, acts, practices
or
courses
of
business described
above,
or in conduct of
similar
purport and object, in
violation
of Section 17(a) of the
Securities
Act [15 U.S.C. §§
77q(a)J, and
Section 10(b) of the
Exchange Act
[15
U.S.C. § 78j]
an
d
Rule lOb-5 [1? CFR §
240.1Ob-5]
thereunder.
III.
Issue an
Order requiring
Defendants
Borland,
BCG,
and the Belize Fund — on a joint and
several basis —
to disgorge the
ill-gotten gains received asa result of the violations alleged
in this
C
omplaint, including
prejudgment
interest.
IV.
Issue anOrder requiring Relief
Defendants
Canyon
Acquisitions an
d
Alana LaTorra
Borland
—jointly an
d severally with the Defendants — to
disgorge the
amounts
that were
transferred for
their
benefit that the
Defendants
received asa result of the violations alleged in
this Complaint, including prejudgment interest.
V.
With regard
to
the Defendants' violative acts,
practices and courses of business
set
forth
herein, issue
anOrder imposing upon Defendants
Borland, BCG, and the
Belize Fund
appropriate civil
penalties pursuant to Section 20(d) of the
Securities Act [15 U.S.C. § 77t(d)],
and Section
21(d)(3)
of the
Exchange Act
[15 U.S.C. § 78u(d)(3)].
VI.
Retain
jurisdiction of
this action in accordance
with the principals of equity
and
the
Federal
Rules
of
Civil
Procedure in order
to implement and carry out the
terms of all orders
an
d
decrees
that may be entered or to
entertain any suitable
application or motion for additional
relief
w
ithin the
jurisdiction of
this
Court.
21

VIT.
Grant
such other relief as
this Court
deems app~•opriate.
JURY
DEMAND
P
ursuant to Rule 3~ of
the Federal
Rules of Civil
Procedure,
the Commission
hereby
r
equests
a trial
by jury.
UNITED
STATES SECURITIES
A
ND
EXCHANGE
COMMISSION
M
ay I
b, 2018
By:~ ~~; ~~~~-~-~
7
A
lyssa Quat
(~1Q-4247)
([email protected])
Benjamin J. Hanauer (hanauerb~sec.gov)
(
pro hnc vice
Penclin~)
Timothy S. Leiman
([email protected])
(
pro htrc vice pending)
A
ndrew P.
O'Brien ([email protected])
(
pro hac l~rce pending)
C
harles J. Kerstetter (kerstetterc cc sec.gov)
-_
(pry hcrc vice penning) -
Chicago Regional Office
175 West
Jackson BhJd., Suite 150
Chicago,
IL
60&04
Telephone: (312)
353-7390
A
ttorneys
for
Plai~~tiff
22

JUDGE S~'~,

Benjamin J. Hanauer (pending pro hac vice)
Timothy S. Leiman (pending pro hac vice)
Andrew P. O'Brien (pending pro hac vice)
Charles J. Kerstetter (pending pro hac vice)
Alyssa Qualls
United States Securities and Exchange Commission
Chicago Regional Office
175 West Jackson Blvd., Suite 1450
Chicago, IL 60604
(312) 353-7390

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

UNITED STATES SECURITIES
AND EXCHANGE COMMISSION,

Plaintiff,

v.

BRENT BORLAND, BORLAND CAPITAL
GROUP, LLC, and BELIZE
INFRASTRUCTURE HIND I, LLC

Defendants, and

CANYON ACQUISITIONS, LLC, and
ALANA LaTORRA BORLAND,

Relief Defendants.

1 8 CV

ECF CASE

COMPLAINT

CIV. ( )

JiiRY DEMANDED

Plaintiff United States Securities and Exchange Commission (the "SEC" or

"Commission") alleges as follows:

~~52

1. This case centers on a fraudulent scheme perpetrated by Defendant Brent Borland

through two entities that he owned and controlled: (1) Borland Capital Group, LLC ("BCG") and

(2) Belize Infrastructure Fund I, LLC ("Belize Fund").

Case 1:18-cv-04352-PKC Document 5 Filed 05/16/18 Page 1 of 22 



 

 

 

 

2. Although Borland, BCG, and Belize Fund (collectively, "Defendants") used

multiple holding companies and over a dozen bank accounts to perpetrate their fraud, their

underlying scheme was simple. Between 2014 and June of 2017, Defendants sold at least $21.9

million of promissory notes (the "Notes") to at least 44 investors in at least eight states.

Defendants promised investors that their money would be used as bridge financing to fund

construction and development of an international airport in Placentia, Belize (the "Placentia

Airport"). But, rather than use all of the funds as represented, Borland misappropriated more

than $5.98 million of investor assets and used the stolen principal to fund his family's lavish

lifestyle.

3. Borland funneled investor funds to himself and his family using the account of

another entity under his control, Relief Defendant Canyon Acquisitions, LLC ("Canyon") — a

holding company owned by Borland and his wife, Relief Defendant Alana LaTorra Borland

("Alana"}. From Canyon's account, Borland used investor funds to pay his family's expenses,

including: (a) mortgage and property tax payments on the Borlands' multi-million dollar Florida

mansion, (b) multiple luxury automobiles, (c) tuition for the Borlands' children at an elite private

school, (d) $36,000 for the Borlands' membership at a posh beach club in Delray Beach, Florida,

(e) nearly $ I0,000 for high-end watches, and (fl almost $2.7 million to pay off Alana's credit

cards.

4. While Borland and his family enjoyed the benefits of at least $5.98 million in

purloined investor cash, Note investors were not so lucky. The maturity dates on almost all, if

not all, of the Notes have passed without repayment and all of the Notes have slipped into

default. To this day, the overwhelming majority of Note investors have been paid none of what

they are owed — no interest payments and no return of principal.

2

Case 1:18-cv-04352-PKC Document 5 Filed 05/16/18 Page 2 of 22 



In the course of the fraud, Defendants repeatedly lied to —and hid material

information from —investors. In addition to lying about the use of investor funds, Defendants

promised outlandish returns with quick payment terms. But, while selling the Notes to new

investors, Defendants hid the fact that the overwhelming majority of prior Notes were in default

and prior Note investors had not been paid a dime of interest or principal.

6. To make matters worse, Defendants perpetuated their fraudulent scheme by

secretly re-pledging the same collateral to multiple investors. Defendants led investors to believe

that their Notes were secured by valuable real estate that was (a) worth at least twice as much as

the amount of the Note, (b) secured only that individual Note, and (c) would not be encumbered

by any other liens or security interests. In reality, Borland pledged the same pazcels of real estate

to multiple investors and reported fake valuations for the properties to investors to make it

appear that the parcels were worth twice the face value of the Note.

7. By making material misrepresentations and omissions to investors, and by

engaging in a fraudulent offering scheme, Borland, BCG and Belize Fund have committed

securities fraud in violation of Section 10(b) of the Securities Exchange Act of 1934 (the

"Exchange Act") [15 U.S.C. §78j(b}] and Rule lOb-5 thereunder (17 C.F.R. 240.1Ob-5] and

Section 17(a} of the Securities Act of 1933 (the "Securities Act") [15 U.S.C. § 77q(a)].

8. Borland's family —including Alana and his mother in-law —benefited from

Defendants' fraud. And, the money that Borland took from investors to fund his family's

lifestyle was only a fraction of the more than $14.4 million of investor funds that Borland

funneled through Canyon. Canyon and Alana have no legitimate claim to the investor funds that

they received as a result of Defendants' fraud and, therefore, were unjustly enriched by receiving

those funds. Canyon and Alana are, therefore, proper Relief Defendants in this action.

3

Case 1:18-cv-04352-PKC Document 5 Filed 05/16/18 Page 3 of 22 



9. The SEC brings this lawsuit to stop Defendants' violations of the federal

securities laws, to prevent further harm to investors, and to seek disgorgement and civil penalties

stemming from Defendants' wrongdoing, among other remedies.

JURISDICTION AND VENUE

10. The SEC brings this action under Securities Act Section 20(b) [IS U.S.C.

§77t(b)], and Exchange Act Sections 21(d) and (e) [15 U.S.C. §§78u(d) and 78u(e)].

1 1. This Court has jurisdiction over this action pursuant to Section 22 of the

Securities Act [15 U.S.C. § ?7v] and Section 27 of the Exchange Act [15 U.S.C. § 78aa].

12. Venue is proper in this Court pursuant to Section 27 of the Exchange Act [15

U.S.C. § 78aa]. Many of the acts, practices, and courses of business constituting the violations

alleged herein have occurred within the jurisdiction of the United States District Court for the

Southern District of New York.

13. Defendant Borland ran BCG out of its offices at 79 Madison Avenue in

Manhattan and has conducted business relating to the Notes from that location, along with

another office in this District, including having phone calls and meetings with existing and

prospective Note investors.

14. Defendants directly and indirectly made use of the means and instrumentalities of

interstate commerce and of the mails in connection with the acts, practices, and courses of

business alleged herein, and will continue to do so unless enjoined.

DEFENDANTS

15. Brent Borland, age 48, is a resident of Sag Hazbor, New York, with a second

home in Delray Beach, Florida. Borland is the sole owner of BCG —which he operates out of its

Manhattan office —and Belize Fund. Borland co-owns Canyon with his wife, Alana. In 2011, the

4

Case 1:18-cv-04352-PKC Document 5 Filed 05/16/18 Page 4 of 22 



 

 

 

 

 

Ontario (Canada) Securities Commission initiated an action against Borland, Canyon, and others.

That action involved an unregistered securities offering where Borland and his codefendants sold

investments in various real estate development projects, primarily projects in Belize. To resolve

that action, Borland and his codefendants were required to repay investors, and cease offering the

investments at issue. Borland was further barred from being an officer or director of any issuer,

registrant, or investment fund subject to the jurisdiction of the Ontario Securities Commission.

16. Belize Infrastructure Fund Y, LLC is a Florida Limited Liability Company that

purports to be in the business of selling promissory notes to finance the construction of an airport

in Placencia, Belize. The Belize Fund is owned and operated by Borland.

17. Borland Capital Group, LLC, is a Delaware Limited Liability Company

headquartered in New York City. It has offices located at 79 Madison Avenue in Manhattan.

According to its website, BCG claims to be "a multi-strategy investment holding company."

Among other things, BCG purports to be active in "alternative investments such as.. .

infrastructure investment, development, and monetization." BCG is owned and operated by

Borland.

RELIEF DEFENDANTS

18. Canyon Acquisitions, LLC, is a Nevada Limited Liability Company. Canyon is

owned by Borland and Alana. Borland's mother in-law serves as Canyon's office nnanager and

issues checks and money orders from Canyon's account at the Borlands' direction. As described

below, in the course of Defendants' fraud, Canyon took at least $14.4 million of investor funds

into its domestic checking account —money to which Canyon had no legitimate claim. Borland

and Alana then used the Canyon account to pay for their own personal expenses.

Case 1:18-cv-04352-PKC Document 5 Filed 05/16/18 Page 5 of 22 



 

19. Alana LaTorra Borland, age 41, is a resident of Sag Harbor, New York, with a

second home in Delray Beach, Florida. Alana is Brent Borland's wife and co-owns Canyon with

Borland. As alleged below, in the course of Defendants' fraud, Alana received the benefit of

investor funds to which she had no legitimate claim, including (a) mortgage and property tax

payments on her home, (b) tuition payments for her children, (c) a family beach club

membership, and (d) almost $2.7 million used to pay off her credit cards.

FACTS

Borland and His Entities:

20. Borland is the sole owner of BCG, a Manhattan-based firm that, according to its

website, claims to be "a multi-strategy investment holding company" that is "active

in...alternative investments such as....infrastructure investment."

21. Among other projects, BCG claims to have invested millions of dollars in a large

resort complex near Placencia, Belize and claims to have invested $24 million along with its

Belizean partners towazds constructing and developing a private airstrip near the purported resort

project into an international airport. Borland claims that the airstrip —which he calls the

Placentia International Airport —would, in addition to helping Borland and his partners sell real

estate in a nearby planned development, be "a significant standalone revenue generator" and that,

once operational, it would immediately receive 35 flights per day.

22. Borland solicited investments in his purported Placentia Airport project through

BCG and Belize Fund.

23. Borland controlled both BCG and Belize Fund, exercising control over every

aspect of their operations, including transactions to and from their bank accounts. Borland signed

D

Case 1:18-cv-04352-PKC Document 5 Filed 05/16/18 Page 6 of 22 



 

all of the Notes issued by BCG and Belize Fund and all of the pledges of collateral issued to

secure those Notes.

Borland Sells Over $21.9 Million of Promissory Notes To Investors:

24. From at least 2014 through June 2017, Borland, BCG, and Belize Fund offered

and sold promissory notes to investors in the United States. In that time, BCG and Belize Fund

sold at least 66 Notes to at least 44 investors in at least 8 states, generating proceeds of at least

$21.9 million. Most of the Notes were issued by Belize Fund, while some were issued in the

name of BCG.

25. In marketing ttie Notes to investors, Borland — and a BCG employee acting at his

direction —told investors that the proceeds of the Notes would be used for the construction and

development of the Placencia Airport. Borland told investors that he and a partner in Belize had

invested $24 million in the airport and that he needed "bridge lenders" to provide additional,

short-term funding for airport construction while he worked to secure more substantial, long-

term financing from institutional investors to complete the project.

26. Borland, BCG,~ and Belize Fund promised investors unusually generous returns

and quick repayment. At a time when the federal funds rate was below 1 %per year, the Notes

generally provided fora 15%return after 3 months and 1%per month for each month after the

first three months, effectively offering interest of 24%per year.

27. The Notes also promised a quick pay-off. Most of the Notes had a 12 or 24-month

term. Some of the Notes provided an even shorter term with a maturity date 3 months after the

date of the Note.

28. Borland, BCG, and Belize Fund told the Note investors that the Notes were

"bridge financing" and would be repaid quickly. In fact, the Notes specified that while payment

7

Case 1:18-cv-04352-PKC Document 5 Filed 05/16/18 Page 7 of 22 



 

 

would be due by the maturity date, the borrower — i. e., BCG or Belize Fund —would be required

to "pre-pay (retire)" the Note within seven days if a target amount of investment was obtained

for the "Placentia International Airport Project." In other words, payment on the Note was due

by the maturity date or when Defendants obtained long-term financing for the Placentia Airport

— whichever came first.

29. Borland told investors that he expected to close such long-term financing for the

Placentia Airport in short order because the airport was an attractive investment. Indeed,

Borland told at least one investor that he "guaranteed" that his investment would only be for a

short term.

30. Although the maturity of the Notes could be accelerated if BCG or Belize Fund

obtained long-term financing for the Placentia Airport, BCG's and Belize Fund's payment

obligations on the Notes were not contingent on such financing. Each Note specified that "[i]f

the Borrower does not satisfy all amounts due on [the Note] on the Maturity Date, the Borrower

will be in default" and that a penalty rate of interest would accrue until the Note was paid. In

other words, regardless of whether Defendants obtained long-term financing for the Placentia

Airport, the Notes were in default once the maturity date passed without payment of principal

and interest.

31. The Notes are "securities" as that term is defined in Exchange Act Section

3(a)(10) [15 U.S.C. § 78c(a)(10)] and Securities Act Section 2(a)(1) [15 U.S.C. § 77b(a)(1)].

32. The Notes suggest the intended use of investors' principal. They specify that the

"Bridge Note" would come due once sufficient financing was obtained for the "Placentia

International Airport Project."

Case 1:18-cv-04352-PKC Document 5 Filed 05/16/18 Page 8 of 22 



 

33. Instead of a prospectus or offering memorandum, Borland used intermediate

brokers to introduce the investment opportunity to investors. Borland and/or his BCG employee

then offered a more detailed explanation of the investment to interested investors by telephone,

e-mail, and web presentation. Borland and his BCG employee told investors during those calls,

presentations, and in emails that their money would be used for construction of the Placencia

Airport.

34. Neither Borland nor his BCG employee told investors that any portion of their

Note proceeds would be paid to Borland or his family. Nor did they mention any other uses of

Note proceeds aside from the Placencia Airport.

Borland's Misappropriation Of Investor Funds:

35. While Borland and his entities were raising $21.9 million from Note investors,

Borland took at least $5.98 million of that money to fund his lavish lifestyle.

36. Borland misappropriated the vast majority of that $5.98 million of investor cash

by funneling it through Canyon, an entity that he owns with his wife, Alana, and which

employed Alana's mother. From there, Borland and Alana directed Alana's mother to issue

checks and wire transfers to pay the Borlands' personal expenses.

37. From April 1, 2014 through September 29, 2017, Borland sent more than $14.4

million of Note proceeds to Canyon's domestic checking account. Although Canyon had some

funds from other sources, that $14.4 million of investor cash represented more than 89% of the

money taken into Canyon's account. None of the funds in the Canyon account was transferred to

accounts in Belize or was otherwise used for construction projects in Belize.

Case 1:18-cv-04352-PKC Document 5 Filed 05/16/18 Page 9 of 22 



 

 

38. Instead, Borland and his wife used the Canyon account — and a BCG account that

also was funded with Note proceeds — as their personal piggy-banks. From those accounts, the

Borlands took at least $5.98 million to pay personal expenses.

39. For example, between April 1, 2014 and September 29, 2017, the Borlands made

the following personal expenditures from the Canyon account that was funded with

misappropriated investor principal:

(a) at least $925,785 in mortgage payments on properties owned by Borland and

Alana, including their b,000 square foot, multi-million dollar Florida mansion;

(b) more than $61,940 in property taxes on Borland and Alana's Florida home in

2016 and 2017;

(c) more than $97,000 to pay private school tuition for the Borlands' children;

(d) more than $36,000 for the Borlands' membership and fees at a private beach

club and day spa in Delray Beach, Florida;

(e) more than $31,000 to a high-end department store;

(~ more than $11,000 in dues to Alana's mother's homeowners association;

(g) a nearly $10,000 payment to an online luxury watch website; and

(h) more than $183,000.00 in cash withdrawals.

40. Between Apri14, 2014 and September 29, 2017, Borland and Alana also took at

least $2.6? million from Canyon's account to pay off four credit cazd accounts in Alana's name.

The credit card accounts were used primarily for personal expenses of the Borlands and none of

the credit card charges related to airport construction in Belize.

41. In addition, Borland and his wife used investor funds to buy luxury automobiles.

For example:

10

Case 1:18-cv-04352-PKC Document 5 Filed 05/16/18 Page 10 of 22 



 

(a) On March 2, 2015, Borland took $25,000 from the Canyon account to make a

payment on a Mercedes G63 luxury Sport Utility Vehicle ("SW") which has

a sticker price over $140,000;

(b) In June 2015, Borland took $66,659.38 from a BCG account —which included

co-mingled investor funds —which he sent to a Cadillac dealership in East

Totowa, New Jersey; and

(c) On April 27, 2017, Borland directed a second payment of $61,937.50 from the

same BCG account to the same Cadillac dealership towazd the purchase of a

Cadillac Escalade luxury SW.

42. In total, Borland misappropriated over $5.98 million from accounts holding co-

mingled investor funds to pay for his family's lavish lifestyle, including payments that benefitted

Alana.

43. While he solicited funds from investors and then misappropriated investor funds

for his family's expenses, Borland —acting through BCG, and Belize Fund —acted with scienter.

Borland knew — or recklessly disregarded —that the overwhelming majority of assets in the

Canyon account came from Note proceeds and that money from that account was being used to

pay his family's personal expenses.

Borland, BCG. and Belize Fund Lied To Investors About the Use of Investor Funds:

44. From 2014 through at least June 2017, Borland, BCG, and Belize Fund told

investors (and prospective investors) that their principal would be used to fund construction and

development of the Placencia Airport. Similarly, term sheets Defendants provided to investors

represent that investors' proceeds will be used for "operating capital." No other use of investor

principal was disclosed to investors.

Case 1:18-cv-04352-PKC Document 5 Filed 05/16/18 Page 11 of 22 



 

 

 

45. Those representations were false when made. While a portion of the invested

funds may have been used to fund construction projects, Borland used at least 40% of investor

funds for other purposes. Most significantly, as discussed at paragraphs 35-43 above, Borland

used at least $5.98 million of investor principal to pay his family's personal expenses.

46. In addition to using investor funds to pay personal expenses, Borland, BCG, and

the Belize Fund diverted Note proceeds to fund real estate projects that had no relation to Belize

construction projects and that were never discussed with investors. Specifically, Belize Fund sent

$778,000 to a BCG account dedicated to a New York condominium investment at the New York

Ritz Carlton Residences in White Plains, New York and another luxury condominium building in

New Rochelle, New York. Borland, BCG, and Belize Fund did not tell Note investors that a

portion of their principal would be used to fund investments in New York condominiums.

47. Borland, BCG, and Belize Fund also diverted $1,431,568 of investor funds to pay

third party brokers who introduced investors to BCG and Belize Fund.

48. In sum, Borland, BCG, and Belize Fund took at least $8,940,666 of investor funds

and used that money in ways that were not related to the disclosed purpose of the Notes — i. e., to

fund construction at the Placencia Airport and related projects in Belize. Those misused funds

represent at least 40% of the all funds raised from Note investors.

49. Defendants' misrepresentations to Note investors regarding use of funds were

material. In making an investment decision, a reasonable investor would deem it important that —

instead of using investor funds as promised (i. e., to fund the construction of Placentia Airport) —

approximately 40% of investor funds was diverted for other purposes, including unrelated real

estate projects, investor commissions, and over $5.98 million for the Borlands' personal

expenses.

12

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50. In making the misrepresentations and omissions identified above, Borland, BCG,

and Belize Fund acted with scienter. At the time they told prospective investors about the nature

of their investment, Borland, BCG, and the Belize Fund knew — or recklessly disregarded —that

the representations were not true and that they had diverted a significant portion of investor

funds for Borland's personal use and for other purposes unrelated to construction projects in

Belize.

Defendants' Fraudulent Pledging of the Sarae Collateral to Multiple Investors:

51. All Note investors received pledges of collateral as "security" for their notes. As

collateral, Borland pledged pazcels of real estate in Belize purportedly owned by Mayan Lagoon

Estates, LTD {"Mayan Estates"). All of the pledges of Mayan Estates pazcels were signed by

Borland and one of his purported Belizean partners.

52. The collateral pledge documents prohibited the pledged parcels of land from

being transferred or encumbered in any way during the term of the pledge. With minor language

deviations, the pledge documents each state that BCG and the Belize Fund "shall not transferor

encumber in any way this pledged property. Pledgor shall not permit any mortgages or liens to

attach to the pledged property until the loan is repaid in its entirety."

53. Despite the fact that the pledge documents prohibited the pledged property from

being transferred or encumbered in any way during the term of the pledge, Borland, BCG and

Belize Fund pledged the same pazcels of property to multiple investors.

54. Most investors were affected by this practice, as approximately 77% of the Notes

were secured by collateral that Borland, BCG, and Belize Fund surreptitiously pledged to other

investors.

13

Case 1:18-cv-04352-PKC Document 5 Filed 05/16/18 Page 13 of 22 



 

5~. For example, between .l~ebruary and June of 201 ~, Borland pledged the same

parcel of land —described as ̀'Placencia Narth Block 36 Parcel 2169 .Known as Lot 84 of the

subdivision" — as collateral to secure Notes of at least 12 different investors. Borland did not

inform any of the 12 investors that their collateral secured other Notes.

~6. As another example, the below chart reflects three instances where the same

parcel of land —described as "Lot 31" —was pledged to secure three dii'ferent Notes within

weeks of one another in June of 2016:

The Surreptitious Re-Pledging ~f Lot 31 t~ Three Investors

D̀ate of
Note
.:.9iS++i

Terni""of
~Tute

-«end .̀

~12

Investor 4mount of ~
Note

Pledged :
l,ot

.t..

Duration
of Pied~e
'.3.' F.~..

- aiue'o
Lot ~ s

-

~6-3-2016 mo. I~ivestor A $250,000 Lot 31 12 mo. X500,000
6-24-2016 12 mo. Investor B $1,000.00a Lot 31 121no. X2,000,000
6-27-2d 1 b 12 mo. Investor C $ l 00,000 Lot 31 12 mo. $200,000

57. Borland signed each of the Collateral Pledge t-lgreements securing the three Notes

identified iii the above table. Each Collateral fledge Agreement stated that: "Prior to obtaining

[the investor's] written consent, [Mayan Estates] shall not transfer or encumber in any way this

pledged property. [Mayan Estates] shall not perniit any mortgages or liens to attach to the

pledged property unfit the loan is repaid in its entirety." Despite that fact, after using Lot 31 to

secure the mote for Investor ~, I3orl~ind encumbered Lot 31 ~~~ith two additional security interests

~y re-pledging it as collateral to secure the Notes for Investor B and Investor C.

~s. In the case of the three investors identif ed in the above table, Borland not only

improperly pledged the same collateral simultaneously to each ~f the three investors, he

disclosed a very different valuation for the collateral each time he pled4~ed it. Each time he

pledged Lot 31 as collateral, Borland assigned ~ value to the lot designed to make it appear that

t}~e lit vas worth t~~ice tl~e amatint of the Note in~restmet~t.

14

Case 1:18-cv-04352-PKC Document 5 Filed 05/16/18 Page 14 of 22 



 

59. Specifically, in the 24-day period between the three Notes, Borland disclosed

three different valuations for Lot 31, ranging between $200,000 and $2,000,000. If Lot 31 even

exists, at least two —and possibly all three — of the valuations that Borland provided for Lot 31

were fake.

60. Borland's secret re-pledging of the same collateral to multiple investors —and

Borland's disclosure of wildly different valuations for the same collateral for each Note it

secured —was material. Borland, BCG, and the Belize Fund told investors that the collateral

pledges would be exclusive. In making an investment decision, a reasonable investor would have

found it important that their collateral was securing the Notes of other investors. Such

duplicative pledging necessarily reduces the value of the collateral to any one investor and

reduces the chance that the collateral — if it exists at all —could be used to secure the investment

in the event of default. A reasonable investor also would find it important that the identified

collateral was assigned radically different valuations when securing other Notes.

61. In pledging the same collateral to multiple investors —and assigning substantially

different values to the same pazcels when pledging the parcel to secure multiple Notes —Borland,

BCG, and Belize Fund acted with scienter. Borland signed each of the Notes on behalf of BCG

and Belize Fund and signed each of the collateral pledge documents related to those Notes.

When he signed, Borland knew — or recklessly disregarded —that (1) the same parcels of real

estate were being pledged to secure multiple Notes, (2) the collateral pledge documents expressly

prohibited the Defendants from encumbering the collateral once pledged (effectively barring the

Defendants from pledging the same parcel to multiple investors), and (3) the collateral pledge

documents assigned very different valuations to the same parcel when securing multiple Notes

(reflecting that at least some of the valuations were fake).

15

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Defendants Fail to Tell New Note Purchasers That Older Notes Were In Default:

62. With few exceptions, investors in the Notes have never received any interest

payments or a return of any portion of their principal. Over the course of the scheme, virtually

all, if not all, of the Notes have entered default as the maturity dates passed without repayment.

63. In marketing the Notes to Investors, Borland, BCG, and Belize Fund touted the

investment potential of the Placencia Airport and assured investors that they would be repaid on

time (if not before).

64. But, Borland, BCG, and Belize Fund failed to disclose to new Note investors that

the overwhelming majority of prior Note investors had not been paid and that the prior Notes

were in default.

65. For example, on Apri18, 2015, Borland, BCG, and Belize Fund sold a $150,000

Note to Investor D. That note provided for repayment in three months. But at that time, Belize

Fund already was in default on nearly $3 million of Notes it had sold to prior investors. Like the

Note sold to Investor D, the earlier notes provided for repayment in three months. Before he

made his investment on the expectation that he would be repaid in three months, Investor D was

not told that Belize Fund already had defaulted on nearly identical Notes with the same 3-month

term.

66. Investor D's Note has long passed its July 8, 2015 maturity date. But — to this day

— Investor D has not been paid any interest or principal.

67. Similarly, on March 30, 2016, a year after Investor D purchased his note —and

over eight months after Investor D's Note entered default — Investor E bought a $500,000 note

issued by Belize Fund. Though Investor E's Note had a 12-month term, Borland assured Investor

E that long-term financing for the Placencia Airpart was imminent and the Note would be repaid

16

Case 1:18-cv-04352-PKC Document 5 Filed 05/16/18 Page 16 of 22 



within a few months. Investor E was never told that — at the time he made his investment —

Belize Fund already had defaulted on Notes sold to Investor D and other investors.

68. As with the other Notes, Investor E's Note is now in default and Investor E has

not received any interest or principal payments.

69. Defendants' misrepresentations and omissions related to prior Note defaults were

material. In evaluating whether to invest in the Notes, a reasonable investor would consider it

important that substantively identical Notes issued to prior investors were in default and that

prior investors had received no interest or principal payments on their investment.

70. In hiding prior Note defaults from Note investors, Borland, BCG, and Belize

Fund acted with scienter. Borland signed each Note issued to investors, communicated with

prospective investors about the Notes, and controlled every aspect of BCG's and Belize Fund's

interactions with investors. In communicating with new investors, Borland, BCG, and Belize

Fund knew — or recklessly disregarded —that Notes issued to prior investors were in default and

that nearly all prior investors had received little if any payment on their investment.

Borland Invokes the Fifth Amendment in Resaonse to Questions Posed by the SEC:

71. As part of its investigation into the securities law violations identified in this

Complaint, the SEC issued subpoenas to Borland, his second-in-command at BCG, his wife

Alana, and his mother in-law, requiring each of them to appear and provide testimony under oath

to the SEC regarding matters including the use of funds Borland raised from investors.

72. Borland, his second-in-command, Alana, and Alana's mother each refused to

provide substantive answers to the SEC's questions and instead invoked their right against self-

incrimination under the Fifth Amendment to the U.S. Constitution.

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COUNTI

Violations of Section 10(b) of the Exchange Act,
and Exchange Act Rule lOb-5

(Against Defendants Borland, BCG, and Belize Fund)

73. Pazagraphs 1 through 72 are realleged and incorporated by reference.

74. As more fully described in paragraphs 1 through 72, Defendants Borland, BCG,

and Belize Fund, in connection with the purchase and sale of securities, by the use of the means

and instrumentalities of interstate commerce and by the use of the mails, directly and indirectly:

used and employed devices, schemes and artifices to defraud; made untrue statements of material

fact and onnitted to state material facts necessary in order to make the statements made, in light

of the circumstances under which they were made, not misleading; and engaged in acts, practices

and courses of business which operated or would have operated as a fraud and deceit upon

purchasers and prospective purchasers of securities.

75. As described in more detail in paragraphs 1 through 72 above Defendants

Borland, BCG, and Belize Fund each acted with scienter in that they knowingly or recklessly

made the material misrepresentations and omissions and engaged in the fraudulent scheme

identified above.

76. By reason of the foregoing, Defendants Borland, BCG, and the Belize Fund

violated Section 10(b) of the Exchange Act [15 U.S.C. §78j(b)] and Rule lOb-5 thereunder [17

C.F.R. 240. I Ob-SJ.

COUNT II

Violations of Section 17(a)(2) of the Securities Act
(Against Defendants Borland, BCG, and the Belize Fund)

77. Paragraphs 1 through 72 are realleged and incorporated by reference as though

fully set forth herein.

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78. By engaging in the conduct described in paragraphs 1-72 above, Borland, BCG,

and the Belize Fund, in the offer and sale of securities, by the use of the means and instruments

of interstate commerce, directly or indirectly, employed devices, schemes and artifices to

defraud.

79. Defendants Borland, BCG, and the Belize Fund intentionally or recklessly

engaged in the devices, schemes, and artifices described above.

80. By reason of the foregoing, Defendants Borland, BCG, and the Belize Fund

violated Section 17(a)(1) of the Securities Act [15 U.S.C. § 77q(a)(1)}.

COUNT III

Violations of Sections 17(a)(2) and (3) of the Securities Act

(Against Defendants Borland, BCG, and the Belize Fund)

81 _ Paragraphs 1 through 72 are realleged and incorporated by reference as though

fully set forth herein.

82. By engaging in the conduct described in paragraphs 1-72 above, Defendants

Borland, BCG, and the Belize Fund, in the offer and sale of securities, by the use of the means

and instruments of transportation or communication in interstate commerce or by use of the

mails, directly or indirectly, have:

a. obtained money or property by means of untrue statements of material fact
or by omitting to state material facts necessary in order to make the
statements made, in light of the circumstances under which they were
made, not misleading; and

b. engaged in transactions, practices, or courses of business that operated or
would operate as a fraud or deceit upon the purchasers of such securities.

83. Defendants Borland, BCG, and the Belize Fund made the untrue statements and

omissions of material fact and engaged in the transactions, practices and courses of business

described above.

19

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84. By reason of the foregoing, Defendants Borland, BCG, and the Belize Fund have

violated Sections 17(a)(2) and (3) of the Securities Act [15 U.S.C. § 77q(a)(2)-(3)].

COUNT IV

(Relief Defendants Canyon and Alana LaTorra Borland)

85. Paragraphs 1 through 72 are realleged and incorporated by reference.

86. As described in paragraphs 1-72 above, between April 2014 and October 2017,

Defendants transferred investor funds for the benefit of Relief Defendants Canyon and Alana

LaTorra Borland.

87. The proceeds identified in paragraphs 1-72 are the proceeds of the violations

committed by Defendants Borland, BCG, and the Belize Fund described in this Complaint.

88. Relief Defendants Canyon and Alana LaTorra Borland have no legitimate claim

to the amounts received from investors identified in paragraphs 1-72, and therefore were unjustly

enriched by receiving those funds.

RELIEF REQUESTED

WHEREFORE, the Commission respectfully requests that this Court:

I.

Issue findings of fact and conclusions of law that defendants committed the violations

charged and alleged herein.

II.

Enter an Order of Permanent Injunction restraining and enjoining Defendants Borland,

BCG, and the Belize Fund, their officers, agents, servants, employees, attorneys and those

persons in active concert or participation with defendants who receive actual notice of the Order,

by personal service or otherwise, and each of them from, directly or indirectly, engaging in the

20

Case 1:18-cv-04352-PKC Document 5 Filed 05/16/18 Page 20 of 22transactions, acts, practices or courses of business described above, or in conduct of similar

purport and object, in violation of Section 17(a) of the Securities Act [15 U.S.C. §§ 77q(a)J, and

Section 10(b) of the Exchange Act [15 U.S.C. § 78j] and Rule lOb-5 [1? CFR § 240.1Ob-5]

thereunder.

III.

Issue an Order requiring Defendants Borland, BCG, and the Belize Fund — on a joint and

several basis — to disgorge the ill-gotten gains received as a result of the violations alleged in this

Complaint, including prejudgment interest.

IV.

Issue an Order requiring Relief Defendants Canyon Acquisitions and Alana LaTorra

Borland —jointly and severally with the Defendants — to disgorge the amounts that were

transferred for their benefit that the Defendants received as a result of the violations alleged in

this Complaint, including prejudgment interest.

V.

With regard to the Defendants' violative acts, practices and courses of business set forth

herein, issue an Order imposing upon Defendants Borland, BCG, and the Belize Fund

appropriate civil penalties pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)],

and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)].

VI.

Retain jurisdiction of this action in accordance with the principals of equity and the

Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders and

decrees that may be entered or to entertain any suitable application or motion for additional relief

within the jurisdiction of this Court.

21

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VIT.

Grant such other relief as this Court deems app~•opriate.

JURY DEMAND

Pursuant to Rule 3~ of the Federal Rules of Civil Procedure, the Commission hereby

requests a trial by jury.

UNITED STATES SECURITIES
AND EXCHANGE COMMISSION

May I b, 2018 By: ~ ~~; ~~~~-~-~ 7

Alyssa Quat (~1Q-4247) ([email protected])
Benjamin J. Hanauer (hanauerb~sec.gov)
(pro hnc vice Penclin~)
Timothy S. Leiman ([email protected])
(pro htrc vice pending)
Andrew P. O'Brien ([email protected])

(pro hac l~rce pending)
Charles J. Kerstetter (kerstetterc cc sec.gov)

- _ (pry hcrc vice penning) -
Chicago Regional Office
175 West Jackson BhJd., Suite 1 50
Chicago, IL 60&04
Telephone: (312) 353-7390

Attorneys for Plai~~tiff

22

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